Mr. Griffin's view is that the standard that has long been applied by the NLRB to evaluate employment in the franchise relationship context is wrong because it does not focus heavily enough on the control that franchisors actually exert over franchisee employees in their day-to-day operations. Mr. Griffin believes that the level of control exerted by McDonald's over the employees of its franchisees is significant enough to change the character of the relationship, making McDonald's not only a franchisor, but also a "joint employer" of its franchisees' employees.

In particular, during the talk Mr. Griffin focused on the computer and software systems that McDonald's requires each of its franchisees to use. In this computer system, he says, McDonald's is able to monitor all activities at each franchise location on a minute-by-minute basis and uses this data to direct its franchisees when to schedule their employees for work, and when to send their employees home. This control, which Mr. Griffin says is direct control over employee hours, is enough to make McDonald's a "joint employer" of those employees.

Of course, the franchisor's view is that the direction given by McDonald's to its franchisees is only guidance, which is given to help the franchisee operate its business more efficiently.

The long term effect that General Counsel's decision, which sent shockwaves around the franchise industry, will have on franchising is still unknown, but his comments during the WVU talk do offer a glimmer of hope to franchisors that they can avoid "joint employer" liability by not having McDonald's level of involvement in day-to-day franchisee operations and employee scheduling.

As we move into 2015, most franchisors will be re-evaluating their franchise documents (including their Franchise Disclosure Documents and Franchise Agreements) as part of the annual update, registration, and renewal process. This is a good time to talk with counsel about ways that those documents can be amended to offer additional elements of protection against being found to be a "joint employer" of franchisees' employees.

If you want to discuss how you may be able to improve your franchise documents to respond to these and other new threats heading into 2015, please feel free to contact me.

Mr. Griffin's view is that the standard that has long been applied by the NLRB to evaluate employment in the franchise relationship context is wrong because it does not focus heavily enough on the control that franchisors actually exert over franchisee employees in their day-to-day operations. Mr. Griffin believes that the level of control exerted by McDonald's over the employees of its franchisees is significant enough to change the character of the relationship, making McDonald's not only a franchisor, but also a "joint employer" of its franchisees' employees.

In particular, during the talk Mr. Griffin focused on the computer and software systems that McDonald's requires each of its franchisees to use. In this computer system, he says, McDonald's is able to monitor all activities at each franchise location on a minute-by-minute basis and uses this data to direct its franchisees when to schedule their employees for work, and when to send their employees home. This control, which Mr. Griffin says is direct control over employee hours, is enough to make McDonald's a "joint employer" of those employees.

Of course, the franchisor's view is that the direction given by McDonald's to its franchisees is only guidance, which is given to help the franchisee operate its business more efficiently.

The long term effect that General Counsel's decision, which sent shockwaves around the franchise industry, will have on franchising is still unknown, but his comments during the WVU talk do offer a glimmer of hope to franchisors that they can avoid "joint employer" liability by not having McDonald's level of involvement in day-to-day franchisee operations and employee scheduling.

As we move into 2015, most franchisors will be re-evaluating their franchise documents (including their Franchise Disclosure Documents and Franchise Agreements) as part of the annual update, registration, and renewal process. This is a good time to talk with counsel about ways that those documents can be amended to offer additional elements of protection against being found to be a "joint employer" of franchisees' employees.

If you want to discuss how you may be able to improve your franchise documents to respond to these and other new threats heading into 2015, please feel free to contact me.

Matthew Kreutzer is a Partner at Howard & Howard Attorneys and serves as Chair of the firm's Franchising, Distribution, and Antitrust Practice Group. Mr. Kreutzer, who is based in the firm's Las Vegas office, is a Certified Specialist in Franchise and Distribution Law by the State Bar of California's Board of Legal Specialization.

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This blog is dedicated to advancing the franchising industry through the sharing of business, legal, and practical information and ideas. This blog is a service of Howard & Howard's Franchising, Distribution, and Antitrust Practice Group.